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CY19 January A collection of Bitcoin commentary from the brightest minds in the crypto community. Crypto Words CY19 January Contents Goals and Scope ......................................................................................................................................................................... 2 Support Crypto Words .......................................................................................................................................................... 3 Cryptocurrency: The Canary in the Coal Mine.................................................................................................. 4 Tweetstorm: Bitcoin’s 10 Year Anniversary ......................................................................................................... 6 Bitcoin: Two Parts Math, One Part Biology .......................................................................................................... 8 Planting Bitcoin - Season (2/4) .................................................................................................................................... 12 Planting Bitcoin - Gardening (4/4) ............................................................................................................................ 18 Planting Bitcoin — Soil (3/4) .......................................................................................................................................... 25 Planting Bitcoin — Species (1/4) ................................................................................................................................ 29 Bitcoin: Winner Takes Most or Winner Takes All? ..................................................................................... 40 Economic Teachings of Bitcoin .................................................................................................................................. 46 Unpacking Bitcoin’s Assurances................................................................................................................................ 67 Tweetstorm: Bitcoin as SoV ........................................................................................................................................... 74 Money, Bitcoin and Time: 1 of 3 .................................................................................................................................. 79 Money, Bitcoin and Time: 2 of 3 ................................................................................................................................ 112 Money, Bitcoin and Time: 3 of 3 ................................................................................................................................151 A Conflict of Crypto Visions ......................................................................................................................................... 175 Disclaimer: ................................................................................................................................................................................... 191 https://cryptowords.github.io/cy19q1m1 1 Crypto Words CY19 January Goals and Scope Crypto Words is a journal of Bitcoin commentary, established February 13, 2019. Its purpose is to document and advance commentary and research in disciplines of particular interest to the Bitcoin community. The journal is broad in scope, publishing content from original research, essays, blog posts, and tweetstorms from a wide variety of fields, especially governance, technology, philosophy, politics, and economics, but also legal theory, history, criticism, and social or cultural analysis. Its broader mission is to capture the conversations and think pieces in the Bitcoin space for current and future researchers. Crypto Words hopes to continue and expand the tradition established by publications such as the Journal of Libertarian Studies and Libertarian Papers. History There exists a gap in Bitcoin publishing. For authors with commentary and scholarly papers on topic, the choice of publication outlets is relatively limited. The number of journals that serve as outlets for crypto research is in any event too small, as the number of crypto thinkers continues to grow with every market cycle. This generation of Bitcoin thinkers have limited places to submit thought pieces for publication. Content is scattered across the web, and in some cases behind paywalls which prevent the free flow of information. With the advent of the Twitter and blogging, authors also now have the option of self-publishing: they post the content to their own site or some private site, link it in a blog post, or post a working paper. But this is obviously not the best way to document and publish. What is needed is a journal that takes full advantage of the possibilities of the digital age as a go to resource for think pieces in the crypto space. Enter Crypto Words. Published independently, Crypto Words is a journal that welcomes submissions on a range of topics of interest to the crypto community. In addition to conventional research articles, we welcome review essays blog posts, tweets as well as papers in other formats, such as distinguished lectures. Finally, wherever possible, content on this site is licensed under a Creative Commons Attribution 4.0 License. Authors retain ownership without restriction of all rights under copyright in their articles. Crypto Words is open access, and we encourage readers to “read, download, copy, distribute, print, search, or link to the full texts of these articles…or use them for any other lawful purpose.” We want our ideas read, spread, and copied. We welcome discourse and debate. https://cryptowords.github.io/cy19q1m1 2 Crypto Words CY19 January Support Crypto Words The posts and journals published here have been carefully curated and crafted as a true labor of love. If you’ve found any of this content useful here’s how to show your thanks and keep the project going. Spread the word Have a website or use social networking sites like Twitter, Facebook, or LinkedIn? Please consider sharing the content found on Crypto Words or linking to https://cryptowords.github.io. Follow us on social media We post regularly on Twitter and use it as our main form of communication. — We don’t rapid fire posts but add commentary where we see fit. Posts are typically links to our content here, trolling nocoiners, sarcastic remarks, and other things regarding development of this site. If these sorts of things interest you, follow along on: Subscribe to our newsletter We publish our journal monthly and share it via Twitter and via newsletter. Consider subscribing to the newsletter. If you’re not on Twitter all day, it might make sense to subscribe so you never miss a publication. Our pledge • We will never sell you out. • We will never shill you shitcoins. • We will only deliver what is promised. https://cryptowords.github.io/cy19q1m1 3 Crypto Words CY19 January Cryptocurrency: The Canary in the Coal Mine What Crypto Can Tell Us About Macro Markets in 2019 By Jill Carlson Posted Jan 1, 2019 Over the last quarter, the market has rejected risk assets across the board in a sudden reversal of the year’s trend. The S&P 500 erased its 9% gain over a matter of weeks in October. The Nasdaq index retraced from an 18% gain to end the year down 5%. But no market has felt more pain recently than that of cryptocurrencies. The aggregate market cap of cryptocurrencies, which topped out at $830 billion last January, has since crumbled to $130 billion. Much of this unwind has occurred only in the last two months, with the crypto market as a whole getting marked down over 40% quarter-to-date. The cryptocurrency market is admittedly miniscule relative to other asset classes. Cryptocurrency (no matter how big the drawdown) is unlikely to have any impact on broader markets any time soon. Bitcoin has demonstrated no substantial correlation to any other asset, whether equities or gold. Nonetheless, what has been happening with this nascent asset class over the last year may reveal some important macro trends. Two years ago, at the end of 2016, the cryptocurrency market stood at $15 billion in value. Trading volumes across all cryptocurrencies hovered in the double-digit millions. What led to the asymptotic spike in prices over the course of 2017? While it may be possible to point to certain headlines and technology developments as catalysts, most would probably dismiss the phenomenon as a speculative bubble. They may not be wrong in this characterization, but they may also miss the macro context in which all of this occurred. We have seen many search for yield trades play out over the last 8 years. With central banks around the world pumping liquidity into the economy, traditionally risky assets have seen their premiums sucked out of them. Emerging markets stocks, bonds, and currencies have benefited from this trend. High beta equities, most notably in the tech sector, have boomed with the FAANG stocks leading the way. This trend has also driven money further out along the risk spectrum into alternative asset classes, ranging from art to cars to venture capital. https://cryptowords.github.io/cy19q1m1 4 Crypto Words CY19 January With rates like these, who needs hedges? Image from Pimco’s 2016 Negative Interest Rate Report. https://global.pimco.com/en-gbl/resources/education/investing-in-a- negative-interest-rate-world The cryptocurrency boom of 2017 may have been the illogical conclusion of this global search for yield. It certainly
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